Health Affairs, 25, no. 1 (2006): 94 doi: 10.1377/hlthaff.25.1.94 © 2006 by Project HOPE	New Online   How Would Obama, McCain Cover The Uninsured?   Cost To Cover Uninsured   Let Health IT Market Evolve   How Rate Health IT Progress?   HIV/AIDS In India, China

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Specialty Hospitals

PROLOGUE

Specialty Hospitals: Issues To Consider

The debate over specialty hospitals is often construed by noncombatants as simple interest-group politics: Community hospitals are perceived as fighting to protect their revenues against the inroads of competitors, which are seen alternatively as exemplars of efficiency or opportunistic cream skimmers. In the larger context, though, the issues are not so simple. A decade ago, "market-driven reform" meant competition between integrated delivery organizations whose incentive for quality and efficiency derived from the capitated payments they received. Specialty competition and price transparency are fee-for-service strategies that exacerbate the distress of the multispecialty medical groups that thrived under capitation and were the darlings of the policy community a decade ago. Thus, it is not just community hospitals that feel besieged by the specter of increasing price competition.

The papers that follow represent work that was commissioned by Congress in the Medicare Prescription Drug, Improvement, and Modernization Act (MMA) of 2003. They do not settle the specialty hospital issue raised by MMA. Rather, they contribute a careful marshaling of the evidence and a review of key analytical issues for those who want an opportunity to think the problem through for themselves. Stuart Guterman’s scrupulously balanced overview frames the questions that Congress has on its plate. Leslie Greenwald and colleagues from the Research Triangle Institute were commissioned by the Centers for Medicare and Medicaid Services (CMS) to examine the effects of physicians’ ownership of specialty hospitals; their paper is based on that research. Jeff Stensland and Ariel Winter worked on the Medicare Payment Advisory Commission’s (MedPAC’s) analysis of utilization patterns in physician-owned specialty hospitals; they discuss their findings here. Chip Kahn, president and CEO of the Federation of American Hospitals, contributes a Perspective.

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